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Efficiencies Will Keep Military Strong in Tight Economy, Lynn Says

By Jim Garamone
American Forces Press Service

MCLEAN, Va., Oct. 6, 2010 – Deputy Defense Secretary William J. Lynn III today reiterated the need for efficiencies as a way to keep the military strong during tight economic times.

“With forces deployed abroad [and] fiscal pressures at home, we face a very complex environment,” he told the World Affairs Council here. “It’s going to require very careful management by the department.”

Defense Secretary Robert M. Gates announced his efficiency initiative during a speech in Abilene, Kan., in April. He wants the department to save $100 billion over five years.

Lynn said the Defense Department must learn from the past as it faces its “fifth inflection point.” The first three prior significant transitions came after the World War II and the Korean and Vietnam wars, he said, and the last came when the Cold War ended and the Soviet Union dissolved.

“What the four transitions have in common is each time we’ve gone through this, we’ve suffered … a disproportionate loss of capability,” Lynn said. “In shorthand, we’re 0-for-4 in managing these transitions.”

Gates wants to manage this transition in a manner that retains and improves the capabilities and qualities the military has right now, Lynn said. “We don’t want to break the force,” he said. “We want to adapt to the fiscal situation we’re in.”

The department has taken three main lessons from the past transitions, Lynn said. The first is to make the hard decisions early, because the budget situation is not going to get better, and resources will be fewer.

“If you cannot afford it now, you clearly are not going to be able to afford it in the future when the funds are tighter,” he said.

Second, he said, it’s not possible to generate the savings the department needs via “pure efficiencies” -- doing the same things with less money. Some pure efficiencies will be realized, he added, but the department is not going to save $100 billion over five years without other measures.

“You are going to have to eliminate lower-priority organizations, lower-priority activities,” Lynn said, citing the elimination of U.S. Joint Forces Command as an example. “It’s not that what they were doing wasn’t valuable,” he said, “but given this environment, there are other, higher priorities.”

The department has to approach the efficiencies in a balanced way and cannot take the majority of money from operations or modernization accounts, Lynn said.

Some work has moved ahead, the deputy secretary said. In 2008, Gates proposed and Congress approved eliminating programs worth more than $300 billion. The efficiency initiative target, he added, is on top of these savings.

Lynn acknowledged some constants. For example, he said, the United States is fighting two wars and cannot reduce force structure. Some 50,000 U.S. troops are in Iraq, 100,000 are in Afghanistan, and counterterrorism requirements exist around the world. The increased operational tempo caused DOD to ask for, and Congress to approve, increases in the Army and Marine Corps, and a halt to reductions in the Navy and Air Force, he noted.

But budgets will not be rising the 2 to 3 percent per year in real growth the military needs to retain its capabilities, Lynn said. President Barack Obama has approved 1 percent real growth in the defense budget over the next years. To maintain the quality of the force and maintain its capabilities, Lynn explained, DOD needs to shift the 1 to 2 percent needed from overhead to warfighting.

Lynn said he sees the $100 billion breaking down to two-thirds of the money coming from transfers from overhead and one-third coming from pure efficiencies. This, he added, is going to require the department to change the way it does business by eliminating layering and duplication of effort. “We must flatten and streamline institutions,” he said. “If we do this, we will improve our operational agility.”

The department has a way forward, Lynn told the group.

“To keep our forces strong in a time of tight budgets, we’ve designed a program of efficiencies that establish reasonable reduction targets focused on specific savings in which we think we can develop a program that can give us the warfighting capabilities we need in this era of fiscal austerity,” he said.

 

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